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State retirement system to reduce pension checks

For the first time in its 26-year history, the state retirement system will reduce pension checks for its state and local government retirees.

Preliminary figures said the state's Core Fund lost 26 percent of its value last year, ending with about $58 billion. That means pensions entirely funded by the core account will be reduced 2.5 percent.

Those who had up to half their investments in the state's Variable Fund could get double-digit reductions. The more aggressive Variable Fund lost 39 percent of its value in 2008.

The exact amount of the benefit cuts will be determined next month. They'll affect about 145,000 retirees from state and local governments and school districts throughout the state.

The city and county of Milwaukee are not part of the system since they have their own program.

State Investment Board director Keith Bozarth said last year was one of the most challenging ever and the state's money managers probably handled it as well as most others.

He also said the state will not abandon its investment strategies in order to be in a solid position once a recovery begins.